FY 2015 Budget Takes Illinois Backwards
Illinois faces a $2 billion revenue collapse in the new fiscal year that beings July 1, but you’d never know it based on the budget passed by the General Assembly. By using unsound budget practices to paper over the $2 billion revenue loss due to the midyear expiration of current income tax rates, the fiscal year 2015 budget halts Illinois’ recent progress and takes us backwards if lawmakers allow revenue to plummet after the November election.
Practices used to obscure the $2 billion revenue collapse fall into two main categories:
- Adding to the roughly $5 billion existing backlog of unpaid bills by underfunding both the state’s contractual obligations and essential programs.
- Borrowing from outside the general funds by taking funds from accounts set aside for specific purposes and promising to pay back the funds later, with interest.
But if it looks like this year’s costs are being met, why is this bad news for taxpayers?
Easy. The state must eventually pay back the funds it has borrowed—whether the funds come from other accounts or from those owed money but who don’t get paid. Unless the General Assembly votes after the November election to maintain current income tax rates, even deeper cuts will be required in the future to pay back the borrowed money and reduce the larger backlog of unpaid bills.
But even these irresponsible practices can’t protect key priorities for Illinois children and families next year. For instance, child care assistance in the new budget is cut by $84 million from this year’s funding level. This cut will mean more payment delays for child care providers, threatening their ability to provide services that are critical to the well-being of children and the stable employment of parents.
Over the past few years, Illinois had been making steady progress in getting its finances out of a hole. If the General Assembly stays its charted course and fails to maintain current income tax rates beyond their scheduled expiration, the budget will cause Illinois to start digging again, particularly in fiscal year 2016, when the revenue collapse will be nearly $5 billion.
Illinois cannot afford to allow this to happen. Lawmakers should have made responsible decisions that fund essential services and lead to a sustainable budget. Doing so would have increased certainty for businesses, bolstered investor confidence, raised our lowest-in-the-nation credit rating, and allowed Illinois to fund the services and investments that are essential to promoting economic growth.
Lawmakers need to get this right before the house of cards comes tumbling down.